Archive for July 1st, 2011

Some cojones on display from Duke Energy, which wants a 17 percent hike in residential electric rates for North Carolina. This would be the same Duke that Indiana regulatory officials all but called liars back in May, a criminally under-reported claim in Duke’s hometown.

But more broadly, walk me through the economic model for Charlotte again. We pay sky-high airfares for the honor of hosting US Airways, we pay sky-high taxes for the honor of doing whatever the hell it is that Bank of Wachovia wants done, and now we are to pay sky-high utility rates to Duke for the honor of — what exactly? Hosting the DNC? Watching Duke give buyouts to the engineers who built the company?

For those making between $50,000 and $125K, unless you are single, haunt Whisky River to drink Bud Light, and ride the McCrory Line weekly, it is a losing proposition to live in Mecklenburg County.

Interesting that the first pass of the congressional remap process sees a drive North for Sue Myrick’s 9th district, essentially taking Patrick McHenry’s chunk of Iredell County from the 10th while giving up Gaston County to McHenry. The upshot of that switch is that Larry Kissell’s 8th gets to keep the half of Union County that is not in Myrick’s 9th. Clearly the GOP wants to make life as difficult as possible for Kissell.

But I’m not enitrely certain handing McHenry a chunk of Gaston unconnected to Charlotte’s powerbrokers and airport locus is that much of a long-term favor, especially when paired with giving the 10th a chunk of Buncombe County in a bid to de-Democrat the 11th — and perhaps send Heath Shuler into the arms of the UT athletic director’s office. McHenry may find himself with a tougher fight than expected.

Sold me out, for chump change (yes you did!!)
Told me that they, they had it all arranged
You handed me down, and thats a fact
Now you’re pumped, You gotta get ready
For the big payback!! (the big payback!!)
That’s where I am, the big payback

Leave it to Billy Clinton to spill the beans, telling Bloomberg that Bank of America’s curiously generous settlement with mortgage investors duped by Countrywide dreck — led by the New York Fed — may be a precursor to the bank forgiving billions in loan principal.

The pols in Washington obviously like that idea — it makes them heroes at zero direct cost to the Treasury. The banks just as obviously see that solution as worse than the disease. It would admit that outstanding loans are nothing more than mythical constructs subject to political and regulatory whim.

But consider the quid pro quo involved, especially if you are Brian Moynihan. In exchange for a limited and targeted writedown, you get political and regulatory forbearance, including implicit Fed and Treasury backstops above and beyond your TBTF peers. The legal and tax implications of writedown are tricky, but Moynihan’s lawyer-brain presumably is wired to do this sort of thing. In an era of little to no revenue growth from lending, perhaps not such a bad deal. Might even get another stock price pop, an obvious worry for BAC execs and investors.

Better still, the President would get to take credit for handing millions of voters big sacks of cash just in time for the DNC convention in Charlotte. Home of Bank of America.